Blurred Lines for Today’s Workplace: Employer Liability for Employee Conduct Outside of the Traditional Workplace

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In a post-pandemic world, the four walls of the office no longer define the workplace. With more and more employees working either remotely or in hybrid roles, employers need to be mindful of their obligations to ensure that their employees are protected from harassment, discrimination, and retaliation, no matter where the employees find themselves working.

To be sure, both federal and state laws cover conduct outside of the traditional workplace that violates fair employment practice laws. However, courts and legislatures often apply differing standards when determining if liability should attach to the employer if the conduct at issue occurred outside of the typical, brick-and-mortar workplace.

At the federal level, Title VII of the Civil Rights Act protects employees from discrimination, harassment, and retaliation that affect their employment. The EEOC has explained that harassment is unlawful when (1) there is enduring conduct that becomes a condition of employment and (2) the conduct is so severe or pervasive that a reasonable person would consider their work environment intimidating, hostile, or abusive. While this guidance is helpful, it does not clearly draw the line of what conduct outside of the office could open an employer up for liability.

In addressing the standard of liability for conduct outside of the office, federal circuit courts of appeal vary in terms of how the line should be drawn between conduct that is actionable and considered “in the workplace” versus conduct that would be considered “outside of the workplace” and not actionable. For example, the Fifth Circuit has taken a narrower view, focusing on the direct impact of the outside-of-work conduct on the employee’s work environment. The court, for instance, declined to attach liability in a case where an emergency room physician — who had contracted a disease at work and faced disability due to the disease — endured harassment and discrimination from her supervisor while out of the office on a leave of absence. The court found that, since she was out on leave and had the option to return to work (but was not actually at work), there was no severe or pervasive impact to her work environment, and the employer would not be liable for the supervisor’s actions.

In contrast, however, the Seventh and First circuits have held that, for an employer to be liable, the conduct need only have consequences in the workplace, regardless of where the conduct took place. For example, the court noted in one case that an employer can be held liable for a sexual assault that occurred between two coworkers at an offsite hotel if reasonable steps were not taken following a report of the incident.

Most states have laws parallel to Title VII, and these state fair employment practice laws also vary as to how far the workplace extends with respect to employer liability. These standards can differ from a prescribed set of factors (like in Massachusetts) to a broader policy attaching liability in most cases of conduct by an employee, even for conduct outside of the workplace (like in California).

Chapter 151 B in Massachusetts prohibits discrimination, harassment, and retaliation in the workplace.  The Supreme Judicial Court of Massachusetts has held that, once an employer is on notice of an incident of discrimination or harassment, they have an affirmative duty to investigate and resolve the situation.  The Massachusetts Commission Against Discrimination (MCAD) has provided guidance to employers to determine if conduct would be considered “within the workplace.” These factors include:

  1. Whether the event at which the conduct occurred is linked to the workplace in any way, such as at an employer-sponsored function;
  2. Whether the conduct occurred during working hours;
  3. The severity of the alleged outside-of-work conduct;
  4. The work relationship of the complainant and the alleged harasser, which includes whether the alleged harasser is a supervisor and whether the alleged harasser and complainant come into contact with one another on the job;
  5. Whether the conduct adversely affected the terms and conditions of the complainant’s employment; or
  6. Whether the conduct impacted the complainant’s work environment.

Courts will balance these factors during their inquiry into whether an employer will be held liable for out-of-work conduct. In one case, liability did not attach after a supervisor — who was not the employee’s direct supervisor — made one sexually obscene phone call to an employee at their home. The court noted that this incident occurred wholly outside of the workplace, had no connection to the workplace, and did not impact any terms of the plaintiff’s employment. In another case, however, the court found against the employer when a manager had harassed an employee outside of the workplace in the context of discussing a personal loan. The court found that their conduct was connected to the workplace in that the loan was paid directly out of the employee’s check, and the harasser was the direct manager of the employee, which ultimately affected the terms of employment.

On the other hand, California employment laws attach liability for any conduct that could contribute to the work environment, regardless of where it took place. Even if the alleged conduct took place off of company property and outside of business hours, employers who fail to reasonably investigate and respond to allegations of discrimination or harassment can face liability. The California Supreme Court has explained that employers are strictly liable for supervisors’ conduct in such instances and have applied a negligence standard for nonsupervisory employees’ conduct. California courts have also carved out an exception where a pre-existing relationship that predates employment may not be considered an influence in the work environment if the conduct was not related to employment. For example, a California court declined to find liability when a supervisor sent lewd photos to an employee because the two had a personal relationship that predated the employee’s employment, and the photos were in no way connected to the workplace.

Recommendations for Employers Navigating the New Workplace

With more people working outside of a traditional office, employers must stay vigilant to ensure that their employees are protected from harassment or discrimination — regardless of how blurred the workplace lines are. Employers should maintain detailed policies that outline expectations of conduct, the definition of the workplace, and reporting and investigating allegations of wrongful conduct. Employers should provide robust training for employees and managers that addresses not only how to address and report conduct but also emphasizes that the employer’s policies do not just apply within the traditional workplace location. In particular, employees should understand that conduct that takes place outside of the traditional workplace — such as cell phone communications and in off-hours social settings — can still fall under the employer’s workplace conduct policies. For example, employees must understand the risks and impact of online harassment. Lastly, with remote employees dispersed across various locations, employers should check local discrimination and harassment training requirements under applicable state and local laws.

Special thanks to Jared Collins, a 2023 summer associate, for his contributions to this article.

Katharine Beattie

Katharine O. Beattie is a partner and litigation lawyer with Foley Lardner LLP and a member of the Labor and Employment Practice Group. Kate’s work primarily involves litigation and counseling on federal and state labor and employment matters, including issues involving discrimination and harassment, leaves of absence, wage and hour disputes on an individual and class-wide basis, employee classification, wrongful termination, trade secret protection, and the enforcement of noncompetition and nondisclosure agreements. She handles employment litigation before federal and state courts, arbitrators, and administrative agencies, including state fair employment and human rights agencies. Kate has also represented clients in cases pertaining to the False Claims Act, insider trading, and shareholder disputes.

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